2010 Rate Adjustments

Lafayette Utilities System is your power, water and wastewater company, and you have a right to know the facts about the rate adjustment approved by the Lafayette City-Parish Council on February 2, 2010. The new rate went into effect during the February 2010 billing cycle, with a second increase taking effect in November 2010. All LUS customers are affected, though the amount of the impact depends on which LUS services they receive. Below is a list of the most common questions we get concerning the adjustment. You can also get a copy of LUS Director Terry Huval's PowerPoint presentation to the City-Parish Council, given on November 17, 2009, by clicking here (Adobe Acrobat Reader required).

	Why does LUS need to adjust rates? Just like many other companies, LUS is having to pay more for necessary supplies and materials because the costs of those materials have gone up. The cost of electric wire and transformers has doubled over the past five years. Without adequate rates, LUS cannot provide the dependable electric, water and wastewater services Lafayette depends upon. How much is the rate adjustment? In simple terms, LUS customers who receive all three services (electricity, water and wastewater) will see about a 7% increase in their bills in February 2010, and another 7% increase in November 2010. However, the total bill for each customer varies greatly depending on usage, the types of services they receive, and the cost of natural gas (to generate power). LUS electric customers are expected to continue paying less than they did in 2008, because natural gas prices remain low. What projects will be funded by money generated from the rate increase? The 5-year LUS Capital Improvements Plan requires funding of more than $150 million for major projects. The most critical project is transmission line upgrades in the Acadiana Load Pocket (ALP) at a cost of $22 million. Other projects include work on LUS combustion turbine plants, boilers and controls, electrical line extensions, electrical substation construction, automated metering and system control infrastructure (i.e., Smart Grid), upgrades to sewer treatment and collection facilities, and some work on water treatment facilities. What is the Acadiana Load Pocket (ALP) transmission project? The Acadiana Load Pocket (ALP) is an area roughly bordered by Highway 190 on the north, Jennings on the west, the Atchafalaya Basin on the east and the Gulf of Mexico on the south. The electrical transmission lines currently serving that area are inadequate to deliver reliable electricity at times of peak demand, such as the hottest summer days. Entergy, CLECO and LUS have agreed to spend more than $200 million to construct ALP transmission line upgrades. These should improve reliability and service to customers in that area. The LUS portion of that project is $22 million. What is the Smart Grid project and how will it benefit me? LUS is investing in technology that will help customers monitor and reduce their use of utilities services through better control of appliances and other devices in their homes. A big part of being able to do that is to know how much electricity (and water) is being used on a real-time basis. LUS plans to put in automated meters and intelligent monitoring systems that will help make this easier to do. The result should be greater customer control over utilities costs. Some of the money generated by the rate increase could go to fund this project, but the federal government is also pitching in. LUS was awarded an $11.6 million Smart Grid Investment Grant through the American Recovery and Reinvestment Act to defray the cost of its Smart Grid project. Are you raising utility rates to help pay for the LUS Fiber project? No. In fact, money generated by the fiber system is actually reducing the level of the LUS rate adjustment. Are LUS employees getting raises because of this increase? No, there are no raises for LUS employees, other than the same percentage for cost-of-living raises used for all LCG employees, included in the 2009-2010 budget that was approved by the Lafayette City-Parish Council. Do you have plans to raise rates again in the next few years? The current rate adjustment approved by the Lafayette City-Parish Council is a two-tier increase. It will take effect in February 2010, with an additional increase taking effect in November 2010. LUS has no further plans to increase utility rates and will do all it can to keep utility rates stable. How do LUS rates compare to those charged by other utility providers in Louisiana? LUS customers currently pay less for their utilities than 85% of the rest of the state. Even with the proposed rate adjustment, LUS would still rank among the cheapest and most cost-effective utility providers in Louisiana. I still have more questions. How can I get the answers? We value our customers, and are eager to answer your questions and concerns. Please email us at askus@lus.org.